UK house prices fall again, rising borrowing costs weigh

LONDON, Oct 7 (Reuters) – British house prices fell for the second time in three months in September month-on-month and rising borrowing costs are expected to put “more downward pressure” soon, the Halifax mortgage lender said Friday. .

Home prices fell 0.1% from August, Halifax reported. In annual terms, house prices rose 9.9%, the smallest such increase since January.

Kim Kinnaird, Halifax’s mortgage manager, said a recent reduction in a tax for homebuyers – part of Finance Minister Kwasi Kwarteng’s “mini-budget” – and the long-standing shortage of homes available for purchase would help support the market.

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But further interest rate hikes, high inflation and the impact of rising mortgage costs on affordability “are likely to put greater downward pressure on house prices. in the coming months,” Kinnaird said.

Kwarteng’s announcement of unfunded tax cuts last month fueled expectations in financial markets of a Bank of England interest rate hike, with some economists predicting a fall in house prices shortly.

Halifax said London continued to show the slowest annual growth rate in the country, with house prices rising 8.1% over the past year.

Last week, rival lender Nationwide said UK house prices failed to rise in monthly terms for the first time since July 2021. read more

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Reporting by William Schomberg; edited by William James and Sarah Young

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